Following Rubio’s Coastal Grill announcing the abrupt closure of 48 restaurants in California citing rising business costs, billionaire entrepreneur Mark Cuban has come forward to defend the recent increase in minimum wage.
What Happened: Collin Rugg, owner of Trending Politics, took to X, formerly Twitter, and shared his take on the restaurant chain closing. Rubio’s decision came after a law was signed by California Governor Gavin Newsom that raised the minimum wage for fast-food workers from $16 to $20.
Rugg took a potshot at Cuban and President Joe Biden saying, “Don’t worry, folks. The economy has never been better. Biden and @mcuban said so.”
In response, Cuban, one of the most famous investors on the TV show “Shark Tank,” said underpaid workers often rely more on government services, which are funded by taxpayers. “When companies pay less than what someone needs to live a basic life, it's often the taxpayers that subsidize the difference.”
He also expressed a preference for paying higher wages and finding ways to increase productivity and profitability. “I literally gave raises to employees a few years ago because it was embarrassing to me that taxpayers might be subsidizing people who work for me,” he stated.
When a user shared concerns that a high minimum wage could hinder small businesses, Cuban disagreed saying he has invested in several small businesses on Shark Tank.
Another user asked Cuban about his previous statement related to the lack of profitability from the Shark Tank investments, the billionaire investor said, “And we just sold a chunk of one of the companies. Now I'm way up.”
When another user questioned his treatment of employees in sold businesses, Cuban stated that he had paid out bonuses to every employee who had been with the company for more than a year.
Why It Matters: Last month, Cuban supported Biden's economic policies and criticized former President Donald Trump for not maintaining the wage growth trends he inherited from Barack Obama. His comments come amid criticism of Biden over the economy, with most Americans believing the U.S. is in a recession.
Previously, renowned economist Peter Schiff warned of a potential financial crisis due to “run-away inflation” and a weakening U.S. dollar. “Wall Street will be totally shocked by just how fast #inflation heats up. It will be an even bigger surprise than was the 2008 Financial Crisis,” he said in May.
Meanwhile, earlier it was reported that as California's minimum wage rises, giants like Chipotle, McDonald's, and Starbucks could implement price hikes.
While the wage increase aims to uplift and empower workers, it presents a challenge for businesses, which must manage higher costs. These expenses are often passed on to consumers through increased product prices.
Photo by Joe Seer on Shutterstock
Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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